Ladies and gentlemen, good afternoon. Welcome to 2019 annual results briefing of BOC Hong Kong (Holdings) Limited. I am Kenny Law, company secretary. Due to the epidemic situation, today's meeting will be held in the format of webcast and conference call. We apologize for any inconvenience for you. Now, let us kick off our meeting. First, I would like to introduce our senior management who are with us today. Mr. Gao Yingxin, Vice Chairman and Chief Executive. Madam Wang Qi, Deputy Chief Executive. Mr. Zhuo Chengwen, Chief Risk Officer. Mr. Yuan Shu, Deputy Chief Executive. Mr. Zhong Xiangqun, Chief Operating Officer. Mr. Wang Bing, Deputy Chief Executive. Mr. Qiu Zhikun, Deputy Chief Executive. Madam Sui Yang, Chief Financial Officer. Madam Ann Kung Yeung Yun Chi, Deputy Chief Executive. Today's meeting has two parts.
First, CE Gao will make brief opening remarks, followed by a video to review our strategy implementation and financial results in 2019. There will be a 30 minutes Q&A session as usual. Now, let us welcome CE Gao.
Good afternoon, ladies and gentlemen. Thanks for attending our result briefing at this special moment. In 2019, the bank's operation and management endured challenges from complicated external environment and internal strategic transformation. Thanks to the support from our customers, shareholder, and friends from media and all constituents of the society. BOC Hong Kong overcame various difficulties and achieved satisfactory performance as a result of solidarity and remitting efforts of our staff. We made remarkable progress in key strategy implementation, such as digital transformation and Southeast Asia business development. The overall operation remains sustainable and prudent.
I would like to take this opportunity to express my deepest gratitude to all of our customers and friends from all walks of life who offer long-term care and support to us. Special thanks to our staff who contributed great dedication during the social unrest and the ongoing epidemic and delivered outstanding performance. Taking this opportunity, I am also very pleased to introduce to you our new Chief Risk Officer, Mr. Zhuo Chengwen. Welcome back with us. Now let us begin our 2019 annual results introduction.
While global economic growth slowed down in 2019, Chinese mainland's economy was generally stable and managed to meet its major targets. Hong Kong's economy faced challenges from external and internal. Pursuing the strategic goal of building a top-class full service and internationalized regional bank, we undertook business transformation and delivered solid financial performance. In 2019, our profit grew by 4.3% to HKD 34.1 billion. ROE and total capital ratio remained healthy, standing at 11.51% and 22.89% respectively. Hong Kong is always our core and home market. We adhered to the customer-centric principle and enhanced our commitment to Hong Kong's economic and livelihood improvement, delivering remarkable results in our personal banking, corporate banking, and financial markets businesses. In 2019, we grew our mid to high-end customer base by 20.9% and our private banking AUM by 24.3%.
We ranked top in new mortgage loans underwriting and outpaced the market in RMB life insurance for nine straight years. For the past 15 years, we have been the largest syndicated loans arranger in the Hong Kong and Macau region and maintained our leadership in IPO receiving bank businesses in Hong Kong. We continually headed the market in the cross-border cash pooling business, helping more clients set up treasury centers in Hong Kong. As a participating lender, we quickly grew our SFGS loans by 4.7 times.
in 2019, we further cemented our leadership in RMB business. We handled offshore RMB clearing volume of RMB 266 trillion , up 13.5% and making up 70% of global volume. We kept enhancing our digital trading platform and proactively expanded our banknotes business to consolidate our advantages in financial markets business. Southeast Asia is our target market with promising growth potential.
We further refined our regional business layout. The acquisition of Bank of China Vientiane Branch in Laos was accomplished in early 2019. We deepened our differentiated regional management model and combined our edge in attractive products and services with the local advantages of our regional entities to make them mainstream local players. Our Jakarta branch topped all foreign bank branches in the Indonesian bank industry in 2018 and was also named 2019 Best Foreign Bank in Indonesia in terms of its stability and profitability.
Our Manila branch was appointed by the People's Bank of China as the RMB clearing bank in the Philippines, while Bank of China (Malaysia) Berhad was reappointed as the RMB clearing bank in Malaysia and appointed as the RMB clearing bank for Labuan Island, Malaysia's offshore financial center. Our Southeast Asian operations center in Nanning, Guangxi, also commenced operation.
Our regional entities produced solid results with net operating income before impairment allowances increasing 16.4% to HKD 2.81 billion . Meanwhile, customer deposits grew 18.3% to HKD 56.6 billion , and customer loans rose 26.7% to HKD 50.4 billion . The Greater Bay Area is a future key market for us. In close collaboration with our parent bank, we led cross-border business innovation, increased market connectivity, and solidified our leading position in the Greater Bay Area. In March 2019, we became the first bank to launch an attestation service that allows Hong Kong residents to open mainland bank accounts. The new service attracted more than 90,000 applicants by the year-end of 2019. The number of our cross-border mid- to high-end customers grew by 26.8%. A cross-border mortgage service for the Greater Bay Area was also launched in early 2020.
We strengthened inter-group collaboration to build an integrated service model to support infrastructure connectivity and innovative companies. We persistently promoted digital transformation and strived to use technologies to improve our efficiency, service, and quality. First, we initiated payment-led transformation. Based on five major contacts, we put together an integrated service solution combining different payment and collection methods. Second, we built ecosystems to re-engineer our customer journeys and facilitated cross-sector convergence through an open platform that provides access to more than 90 APIs with over 130 partners.
Third, we integrated our online channels of corporate banking business and launched intelligent Global Transaction Banking Platform to provide global, intelligent, and interactive financial services. Fourth, we proactively explored intelligent operations. We boosted smart operations by promoting the use of biometrics, smart customer services, smart counter and mobile terminals at our branches. Our mobile banking service was kept upgrading to cater to the customer demand.
Meanwhile, technologies such as blockchain, big data, and AI were employed to improve efficiencies in trade finance and property valuation services, to enhance AML monitoring and risk management, to facilitate automation, and to centralize back-office operations. To ensure the effective implementation of our digital transformation, we reformed our organizational structure, human resources, and appraisal mechanism and reinforced the building of agile working mechanism, instilled innovative culture, and nurtured digital talent. Livi, our virtual banking JV with JD Digits and Jardine Matheson Group, is making steady progress in its pre-launch preparation. Livi will help us to explore new possibilities for our transformation journey. Deeply rooted in Hong Kong, we have always cared about our country while committed to serving society. We took concrete actions to fulfill our corporate social responsibility and promoting a sound corporate culture.
In light of the social events in the second half of 2019 and the coronavirus outbreak early this year, we put the safety and health of our staff first while ensuring undisrupted banking services. Through digital development, we encouraged our customers to do transactions via mobile banking, online banking, and phone banking. We promoted mobile banking account opening, optimized our securities trading platform, and enabled online insurance sales so that our customers can enjoy financial services without leaving home. Since the start of this year, our e-channel migration rate has rapidly increased by 86%. To help our SME and personal customers to weather the economic downturn, we led the market to launch supportive measures, such as principal moratorium of mortgage loans. We also donated HKD 15 million to local charities to fight the epidemic in Hong Kong.
BOCHK was named Best Bank for CSR in Hong Kong by Asiamoney in 2019 for the second consecutive year. We have devised a green sustainability plan based on regulatory requirements, international standards, and market best practices, and confirmed its core strategic position. We are the first listed bank in Hong Kong to set up a board-level sustainability committee, aiming to enhance our ESG governance framework and objectives. We are infusing the sustainable development concept into our core value and workflows to achieve stable and sustainable growth. In 2019, we achieved solid results, thanks to our steady strategy execution. Our customer deposits exceeded HKD 2 trillion, up 5.9% from the end of 2018, increasing our local market share to 14.56%. Our current and saving account deposits grew by 4.2% in 2019, outperforming the market average growth of 0.6%.
Supported by solid broad-based growth, our customer loans increased by 10.2% from the end of 2018 to HKD 1.4 trillion, improving our local market share to 12.97%. Adjusted for swap-related impact, our net interest margin increased by 6 basis points year- on- year to 1.69%, with net interest income growth of 8.4% year- on- year. Due to subdued investment sentiment, our net fee commission income fell by 3.5%.
We actively explored business opportunities, helping us to achieve steady growth in incomes from our insurance, payment services, loans, trust and custody services, currency exchange, and safe deposit box businesses. We maintained sound cost efficiency while ensuring sufficient support to human resources, fintech, and key businesses. Our cost-to-income ratio was 28.5%, better than the industry average. Asset quality remained stable. Our classified or impaired loan ratio and credit cost were stable at 0.23% and 0.14% respectively. Provision coverage was 219%.
Our liquidity remained ample. Our average LCR in 2019 was 157%, while NSFR ended the fourth quarter at 118%, both at solid levels. To reward the long-term support of our shareholders, the board has recommended a final dividend of HKD 0.992 per share. Including the interim dividend, our full-year dividend would be HKD 1.537 per share, up HKD 6.9 cents per share from previous year, representing a dividend payout ratio of 50.5%. In 2020, banking sector will face great challenges amid increasing downside pressures in the global economy. We will firmly pursue our strategic goal as response. In Hong Kong, we will focus on enhancing the customer journey and contacts building and create new edges through digital transformation. In Southeast Asia, we will capture opportunities from regional collaboration and enhance overall growth quality.
In Greater Bay Area, we will focus on meeting livelihood convenience and cross-border financing needs by promoting interconnectivity, so as to consolidate our first-mover advantage. Amid financial markets volatility, we will strengthen our risk warning system and adhere to stringent risk management principles. We will further pursue green, solid, and sustainable growth, create more value for stakeholders, and fulfill our commitment to the economic prosperity and social stability of Hong Kong.
Okay. Hope you like this video, which will also be uploaded on our website. Now let us open the floor for Q&A session. Kindly remind that each person can ask no more than 2 questions each time. Before asking questions, please inform us your name and institution. Now, operator, please give us the first question.
Ladies and gentlemen, we will now open for questions. If you would like to ask telephone questions, please press star 1 on your telephone. Thank you.
Just remind you, if you have any questions, please press star one on your phone and stay online. Operator, please give us the question.
Okay. The first question comes from Gurpreet from Goldman Sachs. Thank you.
Hi. Can you hear me? This is Gurpreet from Goldman Sachs.
Yes. What is the question?
Yes. Thank you, management, for taking my question. My question is regarding the COVID-19 related impact on the asset quality. Have you seen any impact year till date on the borrowers regarding payment difficulties? How is the management working with the borrowers to work through this difficult situation right now?
I will answer this question briefly, and then our Chief Risk Officer will answer the question in full. Since the outbreak of the coronavirus in Hong Kong, in a few industries, the small to medium size enterprises, restaurants, tourism, et cetera, they have been greatly impacted. In their operation and their business, there have been certain difficulties. For many of these difficulties, these are temporary because they are affected by the epidemic.
For us, our bank, together with other banks in Hong Kong, we have launched some measures in face of this. I have already introduced that there are certain measures, for example, for them to postpone the payment of their principals on their loans, for instance. This is to alleviate some of the pressures of them, and this is very helpful for the borrowers to help them go through this patch.
As of now, even though these industries have been greatly impacted, but overall speaking for our bank, for our quality of our loans, it is fine. There is no major numbers of borrowers which have experienced difficulties, even though in their business and operation, I know they're experiencing difficulties. But there are no serious problems with regards to repayment.
Also, you would know for our bank, our loan portfolio for SMEs and the industries concerned, especially for the impacted industries, the proportion is, relatively speaking, not so big. Therefore, for our overall quality of our loans and our overall borrowers in terms of their payments, there had not been major changes so far.
Yes.
Mr. Zhuo?
Thank you, Mr. Gao. I will supplement on two points. The first point, the impacted customers, especially Mr. Gao, mentioned the few industries that are greatly impacted.
We have ongoing monitoring of them, and we very often communicate closely with these customers. In particular, concerning their repayment capability and their operation, we try to understand them in full. Also, we have a list for any early warning, and there would be measures for lowering of risks. The second point is that in our reserve, especially for our ECL modeling, we will also follow very closely the market and also indices on the market and economy, and we update those very closely to adjust our reserve level.
We are going to have the next question. If you have any question, please press star one on your phone and stay online. Operator, next question please.
Thank you, management, for the opportunity. I have two questions. The first question is as follows. For this year, we see that for the risk assets is higher in terms of growth than our total assets. In our present level of capital, which is relatively high, my question is, would you be considering, for example, if indeed this year is impacted by the epidemic, then for our NIM and also slowing of our profits, given that situation, would you maintain the dividend payout ratio per share? That is the first question. A second question is for the Asia Pacific region.
What is your strategy? Can you give us more information about this? At present, what is the total assets or total loans? What is the amount there? Given the epidemic or pandemic situation, how do we see the Asia Pacific or Southeast Asia business?
Regarding the first question, I am going to ask the Chief Risk Officer to take it.
Thank you very much for your question. If you look at the growth of our asset. Concerning the growth of the asset is around 6.5% for the year. This is mainly because of credit risks increase, and that is about 6%. The indicator is really still manageable. If you look at our overall indicators, our Tier 1 and CET1 asset ratio are still at a very good level. Concerning Tier 1 and Tier 2 core capital adequacy rate, it is still increasing. In terms of our overall capital utilization, we are making use of limited capital to make investment on organic growth. This is a good development.
In terms of payment of dividend, in total, because of the reduction of interest by the Fed, it is more than expected. In March, the interest rate is now close to zero. That has an impact on our NIM, N-I-M. We have to make sure that we have sufficient liquidity, and also our asset lending ratio is still reasonable. We have to control the growth in deposit and savings costs so as to reduce the pressure on the continual sliding of NIM. We hope that we can maintain the dividend payout rate to between 40%-60%. In terms of the present payout rate, we believe that it is good both for our shareholders as well as the bank, and we have no plans to change it.
I would just like to supplement that concerning the dividend, because it is between 40%-60%, and this year it is at 50%. I believe that given the present circumstances, we have the room for maneuver to reach 50% of dividend payout ratio. Secondly, you mentioned the growth in Asia-Pacific region. BOC Hong Kong actually has to look at two aspects with regard to Asia-Pacific region.
First of all, we are the hub for syndicated loans for the BOC parent company for Asia-Pacific region. BOC Hong Kong is also looking at the Asia-Pacific portfolio as part of our overall business. For Southeast Asia, our lendings and our asset will account for around 5% of the total, so there is still a lot of room for growth. You can see that from last year, basically, for Southeast Asia, the growth in various areas actually is promising.
If you look at the development in the past two years, and also the potential, we should be able to maintain the growth momentum for Southeast Asia. As for the Asia-Pacific region, excluding Southeast Asia, because BOC Hong Kong really is the Asia-Pacific hub for the parent company, BOC. We are the flagship operator here. In this regard, we will continue to support major enterprises in China to continue to develop in Asia-Pacific region and in Southeast Asia, and we will look for opportunities for mergers and acquisition, so that we will continue to look for growth opportunities.
Now we are ready for the next question. Operator, please give me the next question.
The third question is from Mayling.
Thank you. Can you hear me? Yes. I have got two questions. Regarding provision and the ECL model, because in the second half of last year, investors have been most concerned about social unrest in Hong Kong. So they are questioning whether your macro arrangements have been cautious enough and prudent enough.
Now, concerning the epidemic, which is a black swan, actually is something that was unforeseen a month ago. So I would like to know, in terms of your ECL model and your provision model, whether you are going to make major changes. So are you going to adjust your ECL model now, or are you going to wait until the macroeconomic outlook is clearer? Now the Fed. This is the second question. The Fed has very rapidly reduced interest rate to a very low level.
This will put pressure on your NIM. My question is: What is going to be your take on the 2020 development of NIM? Are we going to go back to the situation in 2015 and 2016?
Thank you for your questions. Mr. Zhuo will answer your first question.
Thank you for the question. About the ECL model, in the second half of last year, the macro situation and the operation situation had certain special conditions. We have put this into the ECL modeling in terms of GDP growth, the unemployment rate, the price of properties, and also other factors and elements. We have included those. This is very prudently and cautiously considered as a whole. In 2019, for impairment expenses, because of the consideration of these factors, there had been about HKD 400 million in terms of impairment. With the pandemic, it is a new situation. We will closely look at the situation and continue to monitor the parameters and also the factors considered in the model.
With the employment, corporate earnings, and also the economic situation, they will be further affected by government policies and the epidemic. We will be looking at the macroeconomic development, and we will be adjusting appropriately our ECL modeling factors considered. In terms of our provisions, this may add increased pressure to a certain extent. For provisions, I think this kind of adjustment is good and necessary. Some of the adjustment may happen in the first quarter. After that, there will be continuous adjustments according to our reading of the economy and the developments. We will have the second question answered by the CFO.
For NIM, as mentioned, in the March period, Fed had already decreased the rate to 0%-0.25%. Economists are saying that given the present situation, it is not likely that U.S. will go for negative interest rates.
In the next few months, it will still be around 0%-0.25%. For Hong Kong dollar interest rate, especially in the recent period of time, we see that the liquidity and the interest rate and corporate activities, dividend payout, IPO, all these will cause volatility, bigger volatility.
Therefore, the Hong Kong dollar interest rate in the long term, we see that this will be affected by the lowering of U.S. dollar interest rates. In the short term, I think it will still be higher than LIBOR still. We feel that for this year, for the mainland, the People's Bank of China will continue with QE to support the economic growth. The RMB liquidity will also be relatively loose, and the interest rate for RMB would be stable. From this overall picture, for interest rates to go up and down is something that is a given.
Yes, this is a challenge for banks. As for our strategy in view of this, because you have not asked this question, that is about our loan growth. Well, according to our own situation, we will continue to focus on high interest loans, the growth of that. We will also be allocating our assets to high interest assets. We will also be compressing our deposit cost. These are important work for us. We will try our best to grow our deposits, and we will have a number of measures. For example, our new business and our fund pools business, we will optimize these so as to meet the demands and needs of our customers. Also for deposit pricing, we want there to be good management so as to lower the NIM impact. Thank you.
Ms. CFO. Operator, please give us the next question.
Thank you very much, management, for giving me the opportunity. I have two questions. The first question is about the quality of our assets. If you look at second half of last year and the changes there, in the mainland, Hong Kong, and Southeast Asia, we see NPL increasing. Can the management share some information, please? That is, for the customers that we have, would you say for Hong Kong companies or mainland companies, the asset quality change is rather big? Also for virtual banking, there is one that had already launched in terms of operation. So my question is, for our bank and our observation of our customers, how do you see our business being affected by virtual bank operation? Do you see any changes in the behavior of the customers, for example, in deposits?
Also for our own virtual banking, is there any difference in terms of the strategy of operation compared to the peers?
Thank you for your question. Question number one will be answered by our Chief Risk Officer. Thank you.
Thank you for your question. Regarding our asset quality, if you look at the NPL rate in 2019, towards the end of 2019, compared to previous year, there was a slight increase. According to our analysis, the increase was attributable to individual companies, mainly a Mainland company affected by its business in Southeast Asia. We have not seen systemic risk coming out of it. We are still confident in the overall asset quality of ours. If you were to separate Mainland China from Southeast Asia, for Mainland China, non-bank exposure of the bank is around 0.21% in terms of NPL rate.
This is mainly because we have been very prudent in selecting industries and also in customers, and we have selected only leading players and leading industries in Mainland China. As for Southeast Asia, the average rate is higher than the overall group rate. Our asset quality in Southeast Asia is also better than required by the regulators in those areas. We see that the NPL cases are more or less fragmented, so there is no systemic risk either. We believe that in individual industries such as leisure industry as well as tourism industry and catering industry, we believe that they will be more impacted by the epidemic, and that is why we are going to effect even more stringent supervision and monitoring over those industries. That is my answer.
Regarding your second question, actually it is in two parts.
Because of the opening of the virtual banking operation, is it going to have a big impact on Hong Kong's traditional banking operators? At this point in time, this particular virtual bank that has just started operation in Hong Kong, we have not seen very obvious impact from this new virtual bank on traditional banking businesses such as savings and lendings.
As for our own virtual banking, what kind of strategy it will adopt. Will it adopt the same strategies as the other new virtual bank, and also to launch more or less the same products? I am going to ask Mr. Zhong to give you the answer. Thank you.
Regarding virtual banking, of course, this is something you are concerned about. I think various virtual banks are now under very active preparation, and they have got their own focuses on customers and also on products.
Our product in the initial period will still mainly be convenient and also safe, and those will be our focus areas. We will be even more penetrative, and we are going to target more the day-to-day operation of our customers. We are going to use that as the principle to guide the launch of our products and the launch of our services. To supplement what Mr. Gao said, what is the impact on traditional bank from virtual bank? I think you have to look at the long run. I think traditional banks will have to digitalize more. If you look at the present numbers, in the present moment, our smartphone banking as well as our e-banking services are growing very fast.
If you look at it from another angle, the growth in our young customers actually has been very marked when compared to the same numbers previous years.
Next question from Bank of America.
Thank you. My first question is this. We can see that many American companies and enterprises are having cash flow problem. Their banks are drawing down their line. I would like to know whether you see the same situation in Hong Kong. Is there an increase in lendings because of liquidity crunch? If so, what is going to be the take of yours in the way forward? Do you believe that there is going to be a big impact? In 2008, many banks' book value has been very severely affected by the financial tsunami in terms of stocks and bonds because their investment portfolio has been eroded by the financial tsunami. Do you believe that the same is going to happen this year?
Thank you for the questions. For the first question, Mr. Wang of our corporate banking will answer that question.
Thank you for your question. For this year, because of the epidemic, the international financial market had been very volatile. For our bank, for our operation, there is no pressure on our liquidity. For our business development, it is actually normal for this year.
If you are asking about the entire year, what is our positioning? Well, you have seen it from the video just now. Because of trade conflict between the U.S. and China, and because of Hong Kong's social situation, there had been difficulties in 2019. But we have outstripped the peers by increasing by 0.33%. As we increase our loan growth for Hong Kong use loans and outside of Hong Kong use loans, we have outstripped the peers in the Hong Kong area as well.
For Southeast Asia, it has grown 200% and more. Given this, we have the following targets. First of all, the background is that we have a very good customer base, and also we have very good strategy in terms of our market allocation, and also thirdly, because our business capabilities. Well, for this year compared to last year, it will be even more difficult as far as I can see. But I think that in the recent period of time, the countries all over the world, whether it is the central banks or governments, they have come up with monetary policies and quantity easing so as to inject more confidence and stimulation into the economy. As the situation continues to recover, I think there will be more and more effect coming from these combo policies.
For capital and demand, the relationship between the two, we will dynamically monitor that to increase our loan growth. Overall, for the entire year, we will have mid to high single digit growth. For Hong Kong, our customers, in terms of large, medium to small size, we have a very good balance. Given that, we will be able to further extend our business. As for cross-border business, for example, for the mainland.
The strategy in the mainland had given us great opportunities. For example, the Yangtze Delta region, the Greater Bay region, and also the Beijing-Tianjin-Hebei region had also given us opportunities. Infrastructure is also another area. Also 5G infrastructure and also AI, big data, and also rail transport, et cetera. All these are major focuses for us going forward. I hope for cross-border loans we will have even better performance.
Now, for Southeast Asia, as Mr. Gao had mentioned, we have already been developing this for a few years. Our regional business strategy had been very stable. For the headquarters in Hong Kong and Southeast Asia institutions, we have had synergistic cooperation and growth. This capability will continue to go into Belt and Road projects or major family-owned businesses or major corporation businesses that are local in Southeast Asia. We will develop these. Also for Southeast Asia and APAC syndication hub, so as to increase our support in terms of syndication and also project financing, and also look for our support acquisitions and mergers opportunities. Overall, we are confident. Let me just supplement one point. For the USD liquidity situation in the U.S. market, there is pressure.
Some of our corporate customers in their Forex and also USD demand, there had been increase of loan demand. Yes, we feel that too. Yes, we see that situation too. Increased demand for loans. In the past two days, because globally, especially for the U.S., the government and the Fed had provided great packages to stimulate the economy, so there is amelioration of the liquidity situation. For loan demand stemming from liquidity, well, some of the corporations in the past have been issuing debt, but they may come to the banks to draw down lines instead. Given that, as mentioned just now, given our liquidity situation, our diversified customer base and our overall business strength, we will be able to manage our risk well and also to maintain our revenue.
On that basis, we will try our best to satisfy the demands and needs of our customers. You had a second question. That is on investments. Would you want to answer that question, and Ms. Yang will supplement?39:04
First of all, thank you for the question. For our securities investments for our bank, 2019 balance was HKD 86 million plus. The market had been affected by the liquidity situation and also the spread, therefore, the market price had come down. The past two days, it had gone up again in terms of securities market price. As for our securities investment in terms of the issuer and the quality of our securities, it is good. About 90% is A3, that is Moody's A3 or above in terms of our bonds. So the credit there is good quality.
Now, for issuance, 60% is government issuer or supranationals. For this type of bonds, the price had not been greatly affected. Further, for securities investment, in our portfolio, over 90% in terms of investment intention, it is for stable income. This is for stable income and given that the recent fluctuations would not affect us much. Secondly, we very much pay attention to the credit quality of the issuers. If that can be kept stable, then I would think we will continue with our hold intentions. We will not change. Going forward, we will continue to pay attention to the market situation. For our Forex and bond portfolio, for bonds, over 50% is USD bonds. For market liquidity, this would be very strong indeed. This is my sharing with you concerning our securities investment. Would you want to supplement?
Yes, I have a couple of points. Bank of America asked a question just now, and we have all gone through the 2008 financial crisis, haven't we? For our bank, in the past few years, for our securities investment, we have adopted a stable and prudent approach. Just now, my colleague have already spoken to this. This over 800 million investment portfolio, 80% are government issued bonds. These are interest rate linked, and a small proportion is credit issuances. The issuers would be big insurance companies, banks, and also major corporations. These are the issuers. There are two sides to this. For credit issues, yes, the price had suffered lately, but because the interest rate had quickly come down, we also have a lot of interest rate bonds which have not suffered at all. Overall speaking, our portfolio is in good position.
Due to the time limit, today's annual result briefing has to stop here. Should you have any further questions, please contact with our investor relations team. Thanks for your participation and see you next time.